The analysis of the EURJPY pair using the short term Elliott Wave view suggests that the rally from the low on 12.7.2023 is currently in progress as a 5 wave pattern. This indicates a significant uptrend in the market movement, with wave 1 ending at 163.71 and a subsequent pullback in wave 2 closing at 160.21. The pair then extended higher, reaching towards 171.58 in wave 3.
Upon closer inspection of the 60-minute timeframe, it is evident that the rally in wave 3 has ended. The ongoing wave 4 pullback is showcasing an internal subdivision in the form of a zigzag Elliott Wave structure. The downward movement from wave 3 saw wave (i) concluding at 170.41, followed by a rally in wave (ii) ending at 171. This was succeeded by a further decline in wave (iii) towards 166.31, and a subsequent rally in wave (iv) reaching 168.55. The final downward movement in wave (v) ended at 165.6, completing wave ((a)) in a higher degree.
Following this, the pair initiated a bounce in wave ((b)), characterized by a zigzag pattern in a lesser degree. This upward movement from wave ((a)) saw wave (a) reaching 167.99, with a pullback in wave (b) ending at 166.34. The final leg wave (c) higher terminated at 168.68, thereby concluding wave ((b)) in a higher degree. The subsequent downward movement in wave ((c)) displayed internal subdivision in the form of 5 waves, indicating a continuation pattern.
Looking ahead, it is important to note that as long as the pivot at the high of 168.68 remains intact, the expectation is for the pair to continue its downward trajectory. The potential target for this decline is estimated to be within the 100% – 161.8% Fibonacci extension range of wave ((a)), falling between 159 to 162.7. This area is expected to act as a support level for the pair, potentially halting the downward movement and offering a turning point for a possible reversal in the market trend.
The short term Elliott Wave view on EURJPY provides valuable insights into the current market dynamics, highlighting the progression of waves and potential future price movements. Traders and investors can use this analysis to make informed decisions and adjust their trading strategies accordingly.